March 6, 2015

How to turn IT from an obstacle into a boost up for new business

Erik Johannisson

Head of Strategic Marketing and Marketing for Technology Services and Modernization, Tieto

Are companies ready to adapt to the changes that digitalisation and business transformation are bringing? In my experience, creativity has never been the challenge in big corporations. The problem, rather, has lied more in its implementation, which is how to get your ideas to the market. In many cases, IT is one of the major barriers to realizing new opportunities.

I have outlined four different ways to help your company succeed by re-working your old IT systems. You'll be able to transform your IT from an obstacle to an enabler and supporter. This is a crucial process if you want to take your business to the next level in these times of digital change.

1) Re-think business

Business is no longer only about you and your customers. You need to start thinking about whole value chains and ecosystems, and how they can be combined and aggregated to create the best value for your customers. This means changes on many levels such as business models, what your business offers, and how you interact and communicate with your customers. Some very interesting new businesses that have emerged because of digitalisation are Postmates and Snapchat, which were created to fit niches created by tech-savvy young people.

2) Re-think innovations

We are moving toward a direction where all companies will soon be more or less digital companies. This means that companies won't have only one service launch or release per year. They will have several, and many companies will have hundreds where new features and functionalities are released on a continuous basis to fulfill new customer needs and requirements. Companies and organisations need to move toward a more continuous delivery model.

The basic idea is simple to understand. It's about being able to deliver new software (both new applications and upgraded parts of existing software) in an automated way. The obvious advantages are faster delivery and getting new functionality out immediately instead of relying on three or four major updates per year. In addition to a faster process, there are benefits like faster feedback for problems, which means better quality and fewer errors. This will also bring IT and business personnel closer together since the innovation cycles will be shortened from months to perhaps hours.

3) Re-align resources

However, always remember that when you are implementing new products and services at a fast rate, you need to make sure your business department is aligned with your IT systems so they are ready to realize and support whatever you are launching. What is launched to customers in the "front-end" needs to be aligned with the back-end and support systems, and vice versa.

There have been many situations where this attempt has failed due to a lack of forethought. One example that we all probably can relate to is a very innovative and popular online promotion or ticket sales event where the website is not supported with enough capacity to handle the peak traffic. Another good example of this is an innovative telecom company in Brazil called TIM who developed a new business promotion, which brought them from the third position in the country to the second.

Unfortunately, their mobile network couldn't support the massive growth of subscribers and traffic on their network to be able to provide a sufficient user experience. After a while, the promotion was suspended by regulatory authorities since the operator could not provide the service that they promised. The business needs were not aligned with the back-end (in this case, the network) and they could not fulfill their promise. From an IT perspective, a modern, scalable and agile IT infrastructure well managed and orchestrated would be the start to improve the flexibility and speed to act on new opportunities.

4) Re-think your growth

Before working at Tieto, I worked at Ericsson, who provides equipment, software, and services to mobile operators globally. To better understand the success factors of the most successful operators in the world, Ericsson conducted a study where they identified six key success factors that we called six "growth codes" for profitable business growth. The conclusion of our study was that the most successful operators in the world have aligned their business strategy with their technology and IT strategy. Basically, they balance an excellent network performance and infrastructure with innovative go-to-market strategies and consumer experience to achieve profitable revenue growth. They re-thought their vision, strategy, mobile broadband, their organizations, and their own roles as operators. They have not been afraid to take bold decisions, and I think there is a lot we can learn from this way of thinking.

Other than re-thinking IT and business, there is another thing to keep in mind. In the end, it all starts with us: people. We need to adjust our attitudes, be open-minded, and be unafraid of changes. We need courage and people to help organisations adjust to these changes.

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